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Important crop insurance dates for corn and soybeans in Iowa:

Date	Corn	Soybeans
Sales closing date	March 15	March 15
Earliest planting date	April 11	April 21
Final planting date	May 31	June 15
End of late planting period	June 25	July 10
Acreage reporting date	July 15	July 15
Premium Due date	August 15	August 15
End of insurance period	December 10	December 10
Policy termination date	March 15	March 15
Production reporting date	April 29	April 29

Revenue Protection is available for major crops in Iowa. The revenue guarantee is based on the actual production history (APH) yield and the average new crop futures market price during the month of February, just as for a Yield Protection policy. The insurable price times the APH yield times the level of coverage chosen equals the gross income guarantee. Coverage options are 50, 55, 60, 65, 70, 75, 80, and 85 percent. If prices for the insured crop are higher by harvest time, the revenue guarantee increases accordingly, with no additional premium. The maximum increase in the insurable price is 100 percent of the February average price. The revenue guarantee cannot be lowered, however. If the producer’s actual gross revenue, calculated as the actual yield times the average new crop futures during the month of October, is below the insured level an indemnity payment equal to the difference is paid. Thus, indemnity payments can be triggered by various combinations of low prices and low yields. The harvest price used to calculate the actual revenue cannot be more than 100 percent higher than the February price (double).

Yield Protection insurance protects against production losses from a wide range of natural causes. Producers can choose to insure their crops at levels ranging from 50 to 85 percent of their actual production history (APH) yield. These bushels can be insured at a price ranging from 55 percent to 100 percent of the projected price each year. The projected price level is the average new crop futures market price during the month prior to the sales closing date. Average prices during February are used for corn (December contract) and soybeans (November contract). If the farm’s actual yield is less than the guaranteed yield, the YP payment is equal to the production deficit multiplied by the price election. Premiums increase in direct proportion to the price coverage level selected, and at an increasing rate for higher yield guarantees. The level of government subsidy of the YP premiums ranges from 100 percent at the lowest yield and price coverage level (catastrophic) to 38 percent at the maximum coverage level. Prevented and delayed planting provisions have been very important to Iowa producers in recent years. When planting is delayed until after the final planting date set by the Risk Management Agency (RMA), the level for the yield guarantee on the insured crop is reduced by 1 percent per day for the next 25 days. Delayed planting provisions take effect on June 1 for corn and on June 16 for soybeans. If no crop at all can be planted (prevented planting), the guarantee remains at 60 percent of the original level. Prevented planting provisions apply after the final planting date for the crop. Prevented planting coverage can also be raised to 65 or 70 percent of the original level, for an added premium, before the insurance sales closing date.

Gross revenue can also be insured under a group risk policy. This plan is known as Group Risk Income Protection, or GRIP. The income guarantee level is based on the county expected yield and the average futures price during the month of February. Likewise, the actual gross revenue is based on the actual county yield and the average futures price at harvest (October for corn and soybeans). Trigger levels and indemnity payments for GRIP are calculated in a manner similar to that used for the Group Risk Plan (GRP), and a harvest price option is available. The maximum dollar value of coverage that can be selected for GRIP is equal to 150 percent of the expected county yield times the February futures price. The minimum is 90 percent. The GRIP policy generally has a lower premium than comparable farm level coverage, and does not require any farm production history. This makes GRIP attractive to producers who have no production records, or a low APH yield. Producers whose farm yields closely follow the year-to-year pattern of the county averages receive the most risk protection from GRIP. Because payments are not based on individual farm yields, however, some short-term yield risk remains.

Three reasons to consider adding hail coverage 

First, you’ve accepted a large deductible by limiting coverage to only a multi-peril crop insurance policy. Should hail damage occur, the 15 to 35 percent deductible you’ve accepted (electing 65 to 85 percent coverage) has never represented more dollars per acre at risk. Net returns to a harvested crop were at extremely high levels in 2012. With profit margins two to three times above normal, it could be devastating to the farmer’s long term future to lose a large portion of this year’s crop.

Second, if you elected to use enterprise units on your multi-peril policy, all fields planted to that crop are combined at the county level should a loss occur. The decision to elect enterprise units is popular, as it might cut farmer paid premiums by as much as 50 percent. However, the use of enterprise units potentially exposes individual farms to a hailstorm, while the rest of the unit may not suffer loss. Protection from spotty loss events such as hail on one farm and not others is more important if you’ve elected enterprise units.

Third, crop insurance companies are providing hail insurance at historically low rates. According to filings made to state insurance departments, crop hail rates are significantly less than their expected losses. Current crop hail rates would have to be twice as high to cover claims and expenses for an average loss year.